Investment in Endowment Plan


A member of an insurance company is trying to convince me for getting an endowment / Life saving plan. According to the plan, I’ll be required to pay a fixed installment every year, for next 20 years. Company will invest the amount in businesses such as Real Estate, Oil companies etc. Profit / Bonus is calculated every year and announced accordingly. The bonus percentage is different every year. The profit can be zero for a certain year but cannot be negative. He says that the amount from this plan will not be invested in stock, will be free of interest and will not be invested with the amount company receives from its customers on account of insurance.

My questions are:
1. Is this kind of investment allowed in Islam?
2. Is it allowed to invest in a company whose primary business is insurance (i.e. State Life Insurance Corporation of Pakistan).


Your investment must be consistent with Shari’ah. According to our contemporary Ulama your investment is in red light if it is involved in:

Conventional banks and insurance companies, interest based financial services, hotels, casinos, cinemas, companies dealing with selling or offering alcohol, pork, gambling, nightclubs, arms, weapons, tobacco…

Imam Senad Agic
American Islamic Center – Chicago
Majlis #1 Head Imam (IABNA)

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